AgriFacts September 2019 Your monthly roundup of news, prices and other farming matters
Market Commentary: Weak sterling helps UK exports With the rain clouds finally clearing, the UK is rapidly progressing towards the end of harvest 2019 and it has become clear that this year’s crops are on course to be at the top end of historic UK production. Farmers have been reporting record breaking yields in both winter and spring barley. Wheat yields are also coming in above average with the total wheat crop set to exceed the 16 million mt marker for the first time since 2015. But is all this reflected in today’s prices? In a word, yes. Prices have been sliding lower as the abundance of grain floods into the market and London wheat futures are back to lows not seen for over two years. The UK will have its staple domestic demand, but there will also be a significant exportable surplus of both wheat and barley to place in excess of domestic requirements. Today the UK is competitive in the world export arena and ports have been busy loading vessels throughout August, but for how much longer will this be the case? Weak sterling is currently helping the UK to connect on export business and most shipments are destined for the EU. Both currency and the opportunity to ship to the EU tariff free are hanging in the balance as the 31st of October rapidly approaches and with it the UK’s due date to part company with the European Union. Our new Prime Minister Boris Johnson has made it abundantly clear that he is prepared to depart without a deal on that date and, In the midst of a political standoff with the European
parliament, our currency has touched on 10 year lows against the Euro. The sentiment in the UK grain trade is understandably nervous. However, if we do leave Europe on 31st then we will have gained something lost over the past two and half years; clarity. Once we understand the parameters of our exit then we will gain the ability to react. The supply chain and port prices may be given a bit of a reshuffle but the fundamentals of grain markets are based on supply and demand. If we lose Europe as an outlet then we must look to North Africa and the Middle East. If Europe loses the UK as a supplier then they will likely purchase more from Black Sea origins. Although this article focuses on UK markets, there is no shortage of grains in the global balance sheet either, confirming that high supply is an overriding factor for the year. However, there is a big price gamble in the form of Brexit to overcome in the first quarter of the campaign, adding another layer of complexity to farm marketing strategies. As we wait to see how this will play out, the UK is reaping the benefits of what it has sown in the form of the inevitable price pressure brought to bear by a large harvest, but it is important to remember that good yields will compensate very well for lower prices in the bottom line. Zoe Andrew Key Account Manager Grain
Market Prices Month (ex farm) Midlands
Feed Wheat
Feed Barley
Oilseed Rape
Currency
September 2019
£118.00/t
£109.00/t
£330.00/t
£/€ = 1.10
October 2019
£121.00/t
£110.00/t
£332.00/t
€/£ = 0.91
November 2019
£122.00/t
£110.00/t
£333.00/t
$/£ = 0.82
Milk Data
Avg Monthly Price
UK Farmgate Milk Price
28.09ppl
Fuel/Straw/Silage
Price
Fertiliser
Price
Red Diesel
51.93p/litre
34% N AN (bags UK) £/tonne
£258.00
Big sq Baled Wheat Straw
£47.00/tonne
0:24:24 blend (bags) £/tonne
£292.00
Big Bale Hay
£94.00/tonne
20:10:10 blend (bags) £tonne
£262.00
p/kg dwt
Finished Steers
Finished Lambs
Finished Pigs
326.5
394.4
150.36